1. The case originated in an application (no.
38581/97) against the Republic of Finland lodged with the European Commission
of Human Rights (“the Commission”) under former Article 25 of the
Convention for the Protection of Human Rights and Fundamental Freedoms
(“the Convention”) by two Finnish nationals, T.K. and S.E. (“the
applicants”), on 2 November 1997. The President of the Chamber acceded
to the applicants’ request not to have their names disclosed (Rule
47 § 3 of the Rules of Court).

2. The second applicant was represented by Mr
Markku Fredman, a lawyer practising in Helsinki. The Finnish Government
(“the Government”) were represented by their Agent, Mr Arto Kosonen,
Director in the Ministry for Foreign Affairs.

3. The applicants alleged that the criminal proceedings
against them had been excessive in length.

4. The application was transmitted to the Court
on 1 November 1998, when Protocol No. 11 to the Convention came into
force (Article 5 § 2 of Protocol No. 11).

5. By a decision of 16 March 2004 the Court declared
the application partly admissible.

6. The applicants and the Government each filed
observations on the merits (Rule 59 § 1). The Chamber decided, after
consulting the parties, that no hearing on the merits was required (Rule
59 § 3 in
fine).

THE FACTS

THE CIRCUMSTANCES OF THE CASE

7. The applicants were born in 1963 and 1951 respectively.
They were shareholders in two limited liability companies. It appears
that at least S.E. was also in a management position in those companies.
Both companies were in the process of being wound up from 1991.

A. The investigation

8. W., a lawyer working for the bank which was
the main creditor of the companies, was appointed as the official receiver
to control the assets of the companies. Having received a special auditor’s
reports about the companies W., on 21 October 1992, requested the police
to investigate whether offences had been committed in the companies
before they went into liquidation. The police interview of the official
receiver began on 9 December 1992 and continued in January 1993. S.E.
was questioned by the police for the first time on 25 May 1993. That
day he was also arrested and a large number of documents were seized
from both the applicants. T.K. was questioned by the police on 27 May
1993.

9. On 12 September 1994 the Supreme Court (korkein oikeus,
högsta domstolen) revoked the seizure of the documents, as requested
by S.E., as the time-limit of four months had passed since they had
been seized and no charges had been brought against the applicants during
that time. The decision became a precedent (KKO 1994:83).

10. The applicants were questioned several times
in the course of the investigations during the period from May 1993
until 1995. It appears that the police investigations concerning the
two companies came to an end in November 1993 and April or May 1995
respectively.

11. S.E. petitioned the Deputy Parliamentary Ombudsman,
who in her decision of 28 February 1997 took the view that the pre-trial
investigations should have been speedier.

B. The first examination of the case

12. The applicants were charged with offences
as dishonest debtors. Writs of summons were served upon S.E. on 1 November
1994 and on 11 May 1995 and upon T.K. on 8 May 1995. Three oral hearings
were held in the Espoo District Court (käräjäoikeus, tingsrätten) on 16 February 1995, 11 May 1995
and 29 June 1995. S.E. was absent from the first hearing due to a lawful
impediment. At the second hearing the complainants requested a deferral
which was granted.

13. On 29 June 1995 the District Court ruled inadmissible
the charges brought against the applicants, without considering their
merits, on the grounds of their being in breach of procedural requirements.
The District Court found that the complainants, i.e. the meeting of
the debtors, had not requested that charges be brought against the applicants.
The mere fact that the official receiver had made a request to that
effect was not sufficient, as the practice at the time of the alleged
offences required that the decision should be made by the meeting of
the debtors. The District Court noted, however, that chapter 39, section
9 (3) of the Criminal Code (rikoslaki, strafflagen), which had entered into force after
the commission of the alleged offences, allowed for the official receiver
to request a prosecution. The District Court concluded that although
the provision was of a procedural nature and as such applicable to offences
committed prior to its entry into force, applying the provision in this
case would lead to an unfavourable outcome for the applicants. Thus,
the District Court decided not to apply the new provision, and accordingly,
not to consider the merits of the charges.

14. In July 1995 the public prosecutor, the complainants
and S.E. appealed. On 28 November 1996 the Helsinki Court of Appeal
(hovioikeus,
hovrätten) found that the official receiver had been entitled
to request criminal proceedings against the applicants under chapter 39,
section 9 (3) of the Criminal Code, as the application of that provision
in the instant case neither affected the period of limitation nor subjected
the applicants to a stricter criminal liability. The Court of Appeal
revoked the District Court’s decision and remitted the case.

15. On 27 January 1997 the applicants requested
leave to appeal. On 7 May 1997 the Supreme Court granted them leave to
appeal and invited the observations of the other parties. On 29 October
1997 the Supreme Court rejected the applicants’ appeal for substantially
the same reasons as those given by the Court of Appeal. The decision
became a precedent (KKO 1997:171).

16. On 3 November 1997 the applicants lodged an
application for an annulment. Further, they requested on 9 December
1997 that the Supreme Court postpone the consideration of the annulment
until the European Court of Human Rights had given judgment and as the
Supreme Court on 5 April 2001 had informed them that the case would be
decided shortly, they requested again that the application be stayed.
However, on 15 November 2001 they withdrew the application for an annulment.

C. The second examination of the case

17. Meanwhile, on 11 February 1998 the District
Court informed the parties that the case would be restored to its case-list.
It was, however, adjourned several times as there were settlement negotiations
going on between the applicants and the complainants. The time-limit
for submission of observations was extended until 31 August 1998 upon
request of the public prosecutor.

18. On 21 October 1998 a contract was signed between
the complainants and the applicants, agreeing that they had no claims,
either civil or criminal, against each other on the basis of the events
mentioned above. According to the Government, the parties reached an
agreement on compensation, whereas the applicants denied that the agreement
concerned any form of compensation.

19. On 14 January 1999 the public prosecutor informed
the District Court that he wanted to withdraw all the charges against
the applicants, finding that his right to bring charges had ceased to
exist as the complainants had withdrawn their claims.1

20. However, at the oral hearing held on 8 February
1999 in the District Court S.E. requested notwithstanding the withdrawal
that it be examined whether the complainants’ prosecution request
had been specific enough for charges to be brought and whether the period
of limitation on the right to bring charges had become time-barred.
The public prosecutor noted that at least three witnesses had died since
the police investigations, and that he might have withdrawn the charges
in any event as the proceedings had already lasted an unreasonably long
time. It was announced by T.K. and the complainants that the case had
been settled as far as they were concerned.

The District Court found on the same day that
the public prosecutor could not withdraw the charges if there was an
objection and that S.E. had the right to a decision in the matter. The
case was adjourned until 15 March 1999 as far as S.E. was concerned. The
charges against T.K. were removed from the docket and the decision was
not appealed against.

21. On 15 March 1999 the District Court, having
held an oral hearing, rejected one of the charges as time-barred and
ruled the rest inadmissible, without considering their merits. In so
far as the District Court refused to consider the merits, it found that
the complainants had not particularised their allegations when reporting
the alleged offences to the police in October 1992 or during the questioning
of the official receiver in January 1993, and that the time-limit for
requesting prosecution, as stipulated by the Decree Implementing the
Criminal Code (rikoslain voimaanpanosta annettu asetus, förordningen om införande
av strafflagen), had thus been exceeded.

22. The public prosecutor and S.E. appealed against
the District Court’s decision not to consider part of the charges.
The case became pending before the Court of Appeal in April 1999.

On 15 August 2000 the Court of Appeal, noting
that S.E. had a right to have the question of guilt examined and as
part of that issue also whether the prosecution procedure had been in
accordance with the law,found that the complainants had particularised their allegations
sufficiently within the period of limitation, and therefore revoked
the District Court’s decision to rule the charges inadmissible. Instead,
the Court of Appeal removed the charges from the docket as the applicants
and the complainants had reached a settlement. Chapter 39, section 2
of the Criminal Code, as in force until the end of 1990, provided that
a debtor could not be convicted if he had satisfied his creditor.

23. On 16 October 2000 S.E. applied to the Supreme
Court for leave to appeal. The case was still pending before the Supreme
Court when the European Court of Human Rights decided to give notice
of the application to the respondent State. On 21 January 2002 the Supreme
Court refused S.E. leave to appeal.

THE LAW

I. ALLEGED VIOLATION OF ARTICLE 6
§ 1 OF THE CONVENTION

24. The applicants claimed to be victims of a
breach of the reasonable time requirement of Article 6 § 1 of the Convention,
which reads, in so far as relevant:

“In the determination of his civil rights...
or of any criminal charge against him, everyone is entitled to a ...
hearing within a reasonable time by [a] ... tribunal...”

A. Period to be taken into account

25. The applicants complained of a breach of the
reasonable time requirement. The criminal proceedings had begun on 25
May 1993 and ended on 21 January 2002.

The Government agreed as to the moment of commencement,
but contested the applicants’ interpretation of when the proceedings
had come to an end.

26. The Court reiterates that in criminal proceedings
the “reasonable time” begins to run with “the official notification
given to an individual by the competent authority of an allegation that
he has committed a criminal offence”, a definition that also corresponds
to the test whether “the situation of the [suspect] has been substantially
affected” (see Eckle v. Germany, judgment of 15 July 1982, Series A no. 51,
§ 73). A person has been found to be subject to a “charge” when
a preliminary investigation has been opened in his case and, although
not under arrest, the applicant has officially learned of the investigation
or has begun to be affected by it (see Corigliano v. Italy, judgment of 10 December 1982, Series A
no. 57, § 34).

Conversely, it is also the case that such proceedings
will end with an official notification to the accused that he or she
is no longer to be pursued on those charges such as would allow a conclusion
that the situation of that person can no longer be considered to be
substantially affected (X v. the United Kingdom, no. 8233/78, Commission decision of
3 October 1979, §§ 64 and 65, unreported). This end is generally brought
about by an acquittal or a conviction (including a conviction upheld
on appeal). The Court has also recognised that proceedings can end through
a unilateral decision taken in favour of the accused, including when
the prosecution formally decides not to prosecute and when a trial judge
terminates the proceedings without a ruling. More recently, the Court
has found that criminal proceedings ended when the prosecution informed
the accused that it had discontinued the proceedings against him (Šleževičius
v. Lithuania, no. 55479/00, § 27, 13 November 2001, unreported)
and when a domestic court found that an accused was unfit to stand trial
by reason of his psychiatric condition (Antoine v. the United Kingdom, (dec.) no. 62960/00, ECHR 2003-VII),
even though in both cases there remained a theoretical possibility that
the charges against the applicant could one day be pursued.

27. Turning to the present case, the Court finds
that the proceedings began with the seizure on 25 May 1993. As to T.K.,
they came to an end on 8 February 1999 when the charges were removed
from the docket and as she did not object to it, it could not reasonably
be said that her situation remained “substantially affected”. For
S.E.’s part the Court reiterates that on 15 August 2000 the Court
of Appeal removed the charges from the docket, which was not objected
to by the other parties. As regards the subsequent proceedings, Article
6 § 1 applied under its “civil head”, as S.E.’s right to a good
reputation was arguably at issue. For his part, the proceedings thus
ended with the Supreme Court’s decision of 21 January 2002.

Consequently, the Court finds that the proceedings
lasted for about five years and eight months in respect of T.K. and
eight years and eight months in respect of S.E.

B. Reasonableness of the length of the proceedings

28. The Court will assess the reasonableness of
the length of the proceedings in the light of the particular circumstances
of the case and having regard to the criteria laid down in its case-law,
in particular the complexity of the case and the conduct of the applicant
and of the relevant authorities. On the latter point, what is at stake
for the applicant has also to be taken into account (see Philis v. Greece (no. 2), judgment of 27 June 1997, Reports of Judgments and Decisions 1997-IV, p. 1083, § 35).

29. The Court observes that the case concerned
economic crimes. It notes the applicants’ arguments that the book-keeping
material and auditor’s reports were available from the start of the
pre-trial investigations and that the Deputy Parliamentary Ombudsman
in her decision of 28 February 1997 took the view that the investigations
should have been speedier. The Court also takes note of the Government’s
contention that the documentary material ran to 28,000 pages and that
a total of 21 people were questioned, and that the case was assigned
only to a few police officers owing to the experience required. The
Government’s argument that the handling of the case had been complicated
by the occurrence of many parallel inter-related proceedings was however
contested by the applicants. Furthermore, the Court notes the procedural
complications, which have been outlined above. It is satisfied that
the case was complex.

30. As to the conduct of the authorities, the
Court notes that the applicants were questioned by the police for the
first time in May 1993. Charges were brought against S.E. on 1 November
1994 and against S.E. and T.K. in May 1995, i.e. about one and a half
years and two years later respectively.

The District Court held three oral hearings from
16 February 1995 and rendered its decision on 29 June 1995. Those proceedings
thus took about five months. The Court of Appeal gave its decision on
28 November 1996, which is one year and five months after the District
Court’s decision. The Supreme Court, having granted leave to appeal,
rejected the appeal on 29 October 1997, which is eleven months after
the Court of Appeal’s decision. The first round of the court proceedings
took two years and eight months for three instances, which was not excessive
as such.

Following the re-introduction in the District
Court’s case-list on 11 February 1998, the case was adjourned several
times. According to the Government, this was explained by the settlement
negotiations, whereas the applicants denied the occurrence of more than
one meeting and a few telephone discussions. On 21 October 1998 the
complainants and the applicants reached a settlement. On 14 January
1999 the public prosecutor decided to withdraw the charges. On 8 February
1999 the District Court acceded to S.E.’s request that the case be
examined notwithstanding the withdrawal of the charges. The charges
against T.K. were removed from the docket and that decision became final.
As to S.E., the District Court rendered its decision on 15 March 1999,
i.e. over one year and four months after the first examination had come
to an end. The Court of Appeal gave its decision on 15 August 2000,
which is one year and five months after the District Court’s decision.
On 21 January 2002 the Supreme Court refused S.E. leave to appeal, i.e.
within about one year and five months from the Court of Appeal’s decision.

The Court is struck by the fact that all this
time was spent on procedural disputes and that a trial on the merits
never took place. Against the background that the case had been pending
for several years already when the first examination of the case had
come to an end, the second examination of the case discloses periods
of inactivity.

31. As to the conduct of the applicants, the Court
notes the Government’s assertion that the applicants requested postponements.
It is clear from the facts outlined above that the application for an
annulment of the Supreme Court’s decision of 29 October 1997 did not
prevent the second examination of the case by the District Court and
the Court of Appeal. By the time it reached the Supreme Court for the
second time in 2000, the application for an annulment had been pending
for nearly three years. The parties disagree as to whether the existence
of the annulment application impeded the handling of the subsequent
leave to appeal matter. Be that as it may, the responsibility for diligence
and proper administration of justice lies primarily with the authorities
and they must themselves take appropriate steps to ensure that proceedings
progress without undue delay. As to the standstill in the proceedings
from February to October 1998, it can be explained by the fact that
the District Court was awaiting the outcome of the parties’ negotiations
with a view to reaching a settlement.

32. The Government contested the applicants’
assertion about having had to live in great uncertainty for an unreasonably
long time as they had never been convicted or been under any threat
of punishment or liability for damages. According to the applicants,
the proceedings had caused T.K. distress and S.E. prolonged unemployment
and mental illness. Both had also been caused severe financial difficulties.
Having regard to the seriousness of the charges, and also to the financial
repercussions of a finding of guilt although no action for damages had
yet been brought against the applicants, the Court does not doubt the
importance of what was at stake up to the delivery of the District Court’s
decisions in the second examination of the case. It was only at a relatively
late stage, following the settlement and the withdrawal of the charges,
that the stakes were reduced.

33. The Court considers that the proceedings were
excessive in length. In particular, the lack of progress in the pre-trial
investigations, which was pointed out also by the Deputy Parliamentary
Ombudsman, and in the second examination of the case caused a delay
for which the Court does not find a sufficient justification.

Accordingly, the period of time that elapsed
in the present case was in breach of the reasonable time requirement.
There has therefore been a violation of Article 6 § 1 of the Convention.

II. APPLICATION OF ARTICLE 41 OF
THE CONVENTION

34. Article 41 of the Convention provides:

“If the Court finds that there has been a violation
of the Convention or the Protocols thereto, and if the internal law
of the High Contracting Party concerned allows only partial reparation
to be made, the Court shall, if necessary, afford just satisfaction
to the injured party.”

A. Damage

35. Under the head of non-pecuniary damage the
first applicant claimed 20,000 euros (EUR) for suffering and distress
caused by the length of the proceedings.

Under the head of pecuniary and non-pecuniary
damage, considering that these could not be separated from one another
as his career had suffered from the loss of reputation and relying on Allenet de Ribemont
v. France (judgment of 10 February 1995, Series A no. 308) and Ferraro v. Italy
(judgment of 19 February 1991, Series A no. 197-A), the second applicant
claimed EUR 50,000 as compensation for the loss of his reputation, career,
finances and health. The lengthy proceedings had led to self-isolation,
depression and even thoughts of self-destruction. He had been hospitalised
twice and his ability to work had been severely reduced.

36. As to pecuniary damage, the Government argued
that there was no causal link between the alleged violation and any
pecuniary damage. They pointed out that the present case concerned the
length of proceedings and not the substance of a dispute before the
domestic courts. As to non-pecuniary damage, the Government considered
the claims excessive as to quantum. Were the Court to find a violation, the applicants
should be awarded compensation not exceeding EUR 1,000 per person.

37. The Court finds that there is no causal link
between the violation found and the alleged pecuniary damage. Consequently,
there is no justification for making any award under this head. The
Court accepts that the applicants have certainly suffered non-pecuniary
damage, such as distress and frustration resulting from the excessive
length of the proceedings, which is not sufficiently made good by the
finding of a violation of the Convention. Making its assessment on an
equitable basis, the Court awards the first applicant EUR 3,000 and
the second applicant EUR 5,000 under this head.

B. Costs and expenses

38. The first applicant claimed reimbursement
for her own work and various expenses in the total amount of EUR 1,500.

The second applicant, who had been represented
by counsel from October 2001, claimed reimbursement for his own work
and various expenses in the amount of EUR 500 and for the legal fees
and expenses of his counsel in the amount of EUR 6,823.14.

39. The Government contested the applicants’
entitlement to compensation for their own work. Further, the Government
left it to the Court’s discretion, whether they had submitted sufficient
documents to support their claims. The Government agreed that the second
applicant had incurred some costs and expenses before the Strasbourg
institutions. However, the number of hours claimed to have been spent
by the lawyer on the case and the hourly rate also appeared somewhat
excessive. The applicants had personally prepared the majority of the
case file from the beginning of the proceedings in 1997 until October
2001 when the representative had been engaged by the second applicant.
In addition, the representative’s invoice included translation costs
in the amount of EUR 1,851 although no details of those costs had been
provided. The Government considered that the total amount of compensation
for costs and expenses for the second applicant should not exceed EUR
1,500 (without value-added tax).

40. The Court finds that the claims under this
head have been fully substantiated only as far as the fees and expenses
of the representative are concerned. Those cover the period following
the giving of notice of the application to the respondent State and
they can be considered to have been actually and necessarily incurred.
The Court reiterates that under Article 41 of the Convention no awards
are made in respect of the time or work put into an application by the
applicant as this cannot be regarded as monetary costs actually incurred
by him or her. However, the Court considers it reasonable that the applicants
be awarded compensation for their various expenses such as copying and
postage, having in particular regard to the fact that since lodging
the initial application in 1997 they have updated the case-file on several
occasions in pace with the domestic proceedings. The second applicant
may be awarded such compensation for expenses incurred prior to engaging
his representative.

In these circumstances, the Court awards the
first applicant EUR 400 and the second applicant EUR 300 for incidental
expenses. In addition, the Court awards the second applicant EUR 6,823.14
(including value-added tax) for the costs of counsel under this head.

C. Default interest

41. The Court considers it appropriate that the
default interest should be based on the marginal lending rate of the
European Central Bank, to which should be added three percentage points.

FOR THESE REASONS, THE COURT UNANIMOUSLY

1.. Holds that there has been a violation of Article 6 § 1 of the
Convention;

2.. Holds

(a) that the respondent State is to pay,
within three months from the date on which the judgment becomes final
according to Article 44 § 2 of the Convention, the following amounts:

(i) to the first applicant EUR 3,000 (three
thousand euros) and to the second applicant EUR 5,000 (five thousand
euros) in respect of non-pecuniary damage;

(ii) to the first applicant EUR 400 (four
hundred euros) and to the second applicant EUR 7,123.14 (seven thousand
one hundred and twenty-three euros fourteen cents), in respect of costs
and expenses;

(iii) any tax that may be chargeable on
the above amounts;

(b) that from the expiry of the above-mentioned
three months until settlement simple interest shall be payable on the
above amounts at a rate equal to the marginal lending rate of the European
Central Bank during the default period plus three percentage points;

3.. Dismisses unanimously the remainder of the applicants’ claim
for just satisfaction.

Done in English, and notified in writing
on 31 May 2005, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.

Michael O’Boyle Nicolas Bratza
Registrar President

1
Following a withdrawal, the charge is removed from the docket, but no
decision on it is handed down. The matter is cancelled and no longer
pending, but it may be commenced again.